One of the promises President Obama issued as he urged passage of health care reform -- if you like your current health care plan, you can keep it -- has proved inaccurate for thousands of Americans now being informed that their existing plans are no longer available.
Less publicized, however, are similar circumstances now facing group plan sponsors that are also receiving unexpected news from their vendors.
Policy cancellations combined with ongoing technical problems at HealthCare.gov, leaves many in the individual insurance market scrambling. It is a situation that drew sharp criticism from lawmakers confronting Health and Human Service Department officials appearing before Congress this week.
“My constituents are frightened,” Rep. Kevin Brady, (R-Texas), told Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services, which runs the ACA marketplace. “They are being forced out of health care plans they like. The clock is ticking. The federal website is broken. Their health care isn’t a glitch.”
Most of those losing their health insurance because the plans do not meet standards set by the Affordable Care Act are in the individual market. However, Jean Hemphill, practice leader of Ballard Spahr’s health care group, observes that some small-group employers have had to discontinue or change their plan offering after carriers quoted new rates as much as 50-60% higher than last year.
“In the employer world, the pre-existing condition requirement has not really been an issue, because HIPAA [already] required that,” Hemphill notes. “The new thing in employer plans is that you cannot have a lifetime limit or annual limits, and many, if not most, employer plans had maximum benefit limits. In addition, some employer plans did not cover mental health conditions and those are now required.”
Now, insurance companies are presenting employers with plans including requisite preventive care and other essential health benefits, and zero caps for maximum cost. Plan sponsors, says Hemphill, are balking at the new prices and leading some to dropping their coverage.
But beyond instances of sticker-shock over new rate quotes, some employers have evaluated the costs and options available on state or federal exchanges and simply determined their employees are better off shopping in the Obamacare marketplaces, Hemphill says.
“It’s not necessarily a bad decision for an employer to do that,” she says. “The employers that I’m working with are good employers and they’re looking at this and trying to make good decisions for themselves and their employees.”
Her advice benefit managers is to communicate any decision to employees in a way that will pro-actively answer their questions of “Why?” and “What do I do now?”
Still, for employees picking a plan from an exchange, then determining they do not qualify for subsidies, the next question to prepare for might well be, “Can I have help paying for it?”
